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New data from the Economic Census 2023 reveals a steady rise in employment and wages, led by the services and manufacturing sectors, with key disparities across skills, sectors, and company sizes.
Malaysia's business landscape employed 10mn people in 2022, marking a 1.8% annual increase since 2015, according to the latest Employment and Salaries & Wages Statistics by the Department of Statistics Malaysia (DOSM).
Per the data, released through the Economic Census 2023, the services sector continued to be the main engine of employment, accounting for 58.3% (5.8mn) of the total workforce, followed by the manufacturing sector with 2.3mn workers. Both sectors showed positive employment growth since the previous census. In contrast, construction, agriculture, as well as mining & quarrying sectors saw employment decline in 2022.
Dato’ Sri Dr. Mohd Uzir Mahidin, Chief Statistician Malaysia attributed these shifts to post-pandemic changes in the labour market landscape.
Labour costs climbed to RM471.8bn in 2022
Total labour cost amounted to RM471.8bn. Of this, RM402.8bn or 85.4% was spent on direct costs such as salaries, wages, bonuses, and other employee remuneration. The remaining RM69bn was for indirect costs, including training expenses, employers’ social contributions, and levies.
The services and manufacturing sectors accounted for the largest share of this spending at a combined RM407.5bn (86.4%). In contrast, labour costs in construction, agriculture, as well as mining & quarrying sectors stood at RM43.4bn, RM11.3bn, and RM9.7bn respectively.
Though the mining & quarrying sector had the smallest total labour cost, it registered the highest labour cost per employee at RM145,739 annually. This is three times higher than the national average of RM47,155. The agriculture sector recorded the lowest at RM21,718 per person.
Salaries & wages showed growth, but gaps remained
Salaries and wages which is the largest chunk of total labour cost saw a steady annual growth rate of 5.4%, rising from RM245.8bn in 2015 to RM354.9bn in 2022.
This translated to an average monthly salary of RM3,332, a 3.7% yearly increase from RM2,590 in 2015. Most sectors saw pay rises except for mining & quarrying, which recorded a negative growth of -0.9%. Despite this, workers in the sector still drew the highest average monthly wage at RM9,422.
Other sectors reported the following average monthly earnings:
- Manufacturing: RM3,513
- Services: RM3,493
- Construction: RM2,536
- Agriculture: RM1,827
Most of Malaysia’s workforce is full-time, semi-skilled
Paid full-time employees formed the bulk of the workforce in 2022, totalling 8.6mn people or 86.1% of all engaged persons. Among these, semi-skilled workers made up the majority at 59.8% (5.2mn), followed by skilled workers at 22.3% and low-skilled workers at 17.9%.
In terms of wages:
- Skilled workers earned RM6,967 monthly on average, with a modest growth rate of 1.5% since 2015.
- Semi-skilled workers earned RM2,548
- Low-skilled workers earned RM1,798
This gap points to a persistent “skills premium” in Malaysia’s labour market.
Selangor leads in workforce and wage share
By state, Selangor topped the chart with 2.7mn workers (26.8%), followed by Wilayah Persekutuan (1.7mn, 16.6%) and Johor (1.3mn, 12.6%). These three states also dominated in total salaries and wages paid, contributing RM106.0bn, RM78.4bn, and RM39.3bn respectively, making up 62.6% of the national wage total.
At the other end of the scale, Perlis had the smallest workforce share at 0.4%, employing just 40,200 people. Interestingly, Pulau Pinang saw the fastest annual workforce growth at 3.5%, driven largely by the manufacturing boom.
MSMEs employ more but pay less
Micro, small, and medium enterprises (MSMEs) were the primary employers in 2022, accounting for 6.5mn workers or 65.2% of the total workforce. On the other hand, large enterprises employed 3.5mn people (34.8%).
However, the wage divide is stark. Employees at large enterprises earned an average of RM4,145 per month. This is 47.5% more than those in MSMEs, who earned RM2,810 on average. The figures suggest a strong correlation between employee compensation, company size, and productivity.
Education levels show mid-tier dominance
In terms of education, the largest group of workers held SPM/SPM(V) or equivalent qualifications, representing 46.2% of the workforce. This was particularly high in the agriculture sector, where 81% of workers had this qualification level.
Meanwhile, 31.3% of workers held tertiary education:
- Diploma: 14.1% (1.4mn people)
- Bachelor/Advanced Diploma: 11.2% (1.1mn people)
- Postgraduate: 1.3% (128,800 people)
Looking ahead
In summing up the findings, Dr Uzir emphasised that these statistics are crucial for informing wage policies, workforce planning, and productivity improvements across sectors.
"A deeper understanding of labour cost trends and employment patterns is key to fostering inclusive growth and enhancing national competitiveness,” he said.
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Lead image / DOSM Facebook
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